Who is hurt most by rising energy costs?

posted at 9:50 am on February 8, 2012 by Jazz Shaw

We’ve been sounding the alarm since early last year about the risks associated with various EPA regulatory maneuvers, particularly the latest Utility MACT and cross state emissions rules. We are even now seeing the loss of significant energy generation on the grid, and an effective war on coal which reduces energy supply leading to the inevitable rise in prices. Not only are gas prices spiking in a trend which is expected to continue through the year, but home heating and utility costs are reflecting the fallout from these policies as well. But who bears the brunt of the increased costs?

Energy costs for U.S. households will almost double this year from 2001, consuming a fifth of the annual income for half of American homes, according to a study by a utility group that opposes limits on coal use.

The American Coalition for Clean Coal Electricity, which includes Atlanta-based Southern Co. and Peabody Energy Corp. in St. Louis, said the 50.4 percent of households earning less than $50,000 may pay even higher costs as regulators consider limits on coal-burning power plants.

The study is “further evidence that these regs are going to cause an impact on the American family,” said Lisa Camooso Miller, vice president for media relations for the Washington- based coalition, in an interview.

The study (.pdf version of full report) breaks down the rising costs seen in U.S. households based on income and the results are fairly stark, as shown in the following graphic.

The following bullet points are also highlighted:

Energy costs are growing and eating up a disproportionate share of low and fixed-income families’ budgets. The 60 million households that earn less than $50,000 per year, or half of all U.S. families, will devote an estimated 21 percent of their after-tax incomes to energy, compared to 12 percent spent in 2001.

Energy cost burdens are greatest on the poorest families. The energy bills of families earning less than $10,000 have risen to 78 percent of their after-tax income.

Minority families are burdened by higher energy costs. More than 60 percent of Black and Hispanic families had pre-tax household incomes below $50,000 in 2010, compared with 39 percent for Asian families and 46 percent for white households.

Lower and fixed-income senior households are among those most vulnerable to energy price increases. Food, health care and other necessities compete with energy for a share of the household budget. The $31,408 median income of senior U.S. households means that half of these households depend on incomes below this level.

EPA regulations drive up electricity prices. Virtually all of the residential electricity price increases over the past two decades have occurred since 2000. These increases are due in part to additional capital, operating and maintenance costs associated with meeting clean air and other environmental standards.

Electricity is the bargain among all consumer energy products. This is due, in part, to the utility industry’s reliance on affordable coal. Electricity prices have increased by 51 percent in nominal dollars since 1990, while the nominal prices of residential natural gas and gasoline have nearly doubled and tripled, respectively.

This is an election season when candidates need to address the needs of millions of Americans struggling under a rough economy, unemployment and uncertain futures. Yet another aspect of the study highlights that Hispanics and other minority communities are also paying disproportionately for Obama’s energy agenda. The majority of people who will select the next President and the makeup of Congress are not riding around in private jets, but are the ones figuring out how to pay the bills next month. This study should make it clear precisely who is being hurt most by the policies of the current administration and the direction we need to take going forward.

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You know, when I was asked earlier about the issue of coal, uh, you know — Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.

Even regardless of what I say about whether coal is good or bad. Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it — whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.

52% of the voting public were either not listening or were under the belief that they are sufficiently insulated from the effects of his plans.

Absolutely it’s on the poor. And it’s mainly the result of inflation. We’ve been paying double for gasoline than we paid ten years ago, not to mention higher prices for everything else. It’s how the extravagant spending of Bush and Obama and their parties have been financed. And it’s done mainly on the backs of the poor and middle-class. So much for compassionate conservatism and bleeding-heart liberalism.

Absolutely it’s on the poor. And it’s mainly the result of inflation. We’ve been paying double for gasoline than we paid ten years ago, not to mention higher prices for everything else.
rickv404 on February 8, 2012 at 9:59 AM

Just an opportunity for more government subsidies to the “poor” to help offset the increases. Democrats will demand this and Repubs will cave. Second verse same as the first…

Aplombed on February 8, 2012 at 9:59 AM

Yep. The maximum earmings limit for HEAP and other assistance was raised already and will be again. The poor won’t suffer, they’ll get more government assistance. For example, most subsidized housing already includes heat in the reduced rent. Then there is the HEAP programs which give one time pay outs. And others that reduce the cost to a small percentage of the bill and forgive the rest.
It’s the middle class who will be hurt by this, not the poor.

It is all these rubes in DC and it is about anything they can tax. I have been on a tear trying to cut my monthly bills as household revenue tumbles. Fer instance I took every feature off my AT&T landline to pare it down to the $20/month rate.

That rate has over 43% TAXES AND FEES!!! to make it about $36. I called John Cornyn’s office to ask what all the federal taxes are paying for. They had no idea and aooffered an 800 number to the FCC.

This is why $4-$5 gasoline will absolutely KILL any hope of Obama winning re-election without an armed coup.

Which I don’t put past him.

Obama has been out front and center on killing domestic drilling AND the Keystone pipeline. All you need to do is run an ad juxtaposing the price of gas and Obama’s anti Keystone statement and you could run Alfred E. Neumann against him and win 49 of the 57 states.

Mr. Romney joined activists outside an aging, coal-fired plant in 2003 to show his commitment to the emissions caps. “I will not create jobs or hold jobs that kill people, and that plant, that plant kills people,” he said.

I’m not poor, or elderly (though my kid’s say I’m OLD)…but it is killing me! I drive alot, use propane for heat…etc.

KOOLAID2 on February 8, 2012 at 10:10 AM

I agree. LIHEAP/HEAP helps the poor but anyone else gets the shaft. Don’t know where you live but in most places a single person making $24000 can get assistance or a family of 4 making $45000 can get assistance up to $450 through regular HEAP and another $650 for propane through Emergency HEAP.
It is possible for people to game this system too. Let’s say you buy one shipment of propane in the Fall, partly paid for by LIHEAP.You use space heaters and get by on that until January. Then you run out. You can get up to $650 to get more. Then you may have to get one more fill. Go all summer and start oover in the Fall. Same thing for any heating. It used to be worse when the starting date for Emergency HEAP was late November. People lierally could have heat with out paying more than $100 a year.

Next up> Government takes over the utility companies and energy companies. Lowers cost to the poor and makes those making over 50,000 per year pay their fair share.

Energy redistribution, its coming. They came for our privacy, they came for our free speech, they came for our freedom to practice religion, they have taken the banks and the auto companies. I give him to August 2012 before he has it all.

The one group really hurt, besides the middle class, is the elderly. Their income is often much lower than anyone on TANF. But if you know any elderly who need help with heating, besides HEAP, most utility companies offer reduced rate programs for seniors and disabled, especially those on low income. I don’t have a problem with that at all. They paid for their heat in the past and can use the help now. My gas company even has a program where you can pay an extra $1.00 a month voluntarily to help with this program.

Shale gas is one of the great boons to poor people, in that it’s driven down the cost of natural gas, lowering utility bills. Yet New York state and the all the radical enviros are on a new jihad against the fracking that brings us this cheap, clean fuel.

Absolutely it’s on the poor. And it’s mainly the result of inflation. We’ve been paying double for gasoline than we paid ten years ago, not to mention higher prices for everything else. It’s how the extravagant spending of Bush and Obama and their parties have been financed. And it’s done mainly on the backs of the poor and middle-class. So much for compassionate conservatism and bleeding-heart liberalism.

We should have seen these results of the EPA, acting like Congress and OSHA at the Sate of the Union Show when Obama lied saying energy production has increased. When he opens his trap you know it is a lie ready to be pushed out. The reality is just the opposite of what he says. One thing is true though – North Dakota has seen an increase in oil production, although the Obama is taking steps to stop that.

It isn’t just the cost of gas, but the cost of food that is affected. You think a lb. of ground beef is high now? You wait until fuel prices rise even more! Cost will continue to climb until producers get some relief from the cost of fuel.

Obama stated that energy costs were going to go up under his regime, but the idiot masses voted for him anyway. Now the idiot masses, along with the rest of us, will have to pay for their mistake. It will be interesting to see if the idiot masses will vote for him again.

It’s how the extravagant spending of Bush and Obama and their parties have been financed. And it’s done mainly on the backs of the poor and middle-class. So much for compassionate conservatism and bleeding-heart liberalism.

rickv404 on February 8, 2012 at 9:59 AM

The price of fuel did not start rising until the Dems took control of Congress in 2006. At the time that the fuel started to climb, gas was around $1 a gallon. It kept rising until Obama took control. When Obama got into office gas was less than $2 a gallon. So, let’s put the fault where it belongs.

It’s part of the wealth distribution deal. It goes up for everyone, hurts the economy, but liberals like Obama will extract the cost from some top percentage of taxpayers (top 5%, top 10%, top 25%, whatevs) and subsidize the “poor” with a nontaxable benefit. He never loses the votes of the filthy rich who think this is how society should operate. And with every energy user that gets enrolled in a fuel-subsidy program, he buys additional votes now, increased dependence, and increasing inability to reverse the dependence.

You know. If you just assume 1.2 million more gallons of gasoline produced per 100,000 barrels of oil, the government can report an average $1.699 per gallon price at the pump, for benefit of New York Times reading, Obama voting retards.

Obama stated that energy costs were going to go up under his regime, but the idiot masses voted for him anyway. Now the idiot masses, along with the rest of us, will have to pay for their mistake. It will be interesting to see if the idiot masses will vote for him again.

cajunpatriot on February 8, 2012 at 10:57 AM

Regardless of what he said and regardless of what he is truly all about, too many Americans wanted to vote for their Jackie Robinson for president. I remember that Walter Williams wrote in March or April 2008 that Obama was no Jackie Robinson.

It’s been a mild winter through most of the US this year, so I don’t think most people will notice the higher costs as much in that area. Gas prices are another story though. There are many factors in play that suggest gas prices will go through the roof this summer, and BHO is responsible for most of those factors. High gas prices are something that voters see every day and it doesn’t matter if the media tries to ignore them.

My favorite gasoline price story comes from my local newspaper. Back in 2005 or so, they used to run a chart every week listing the price per gallon at 10 local stations from lowest to highest price.

The manager of the station whose price always appeared last eventually got very p!ssy when the reporter called each week and would sometimes refuse to give it out. He didn’t like the fact that his station was always last because he had the highest price per gallon which was … $1.50.

The poor and the elderly are having the biggest bite taken out of their checkbooks.

In CA, the answer to that problem is a surcharge on electric, gas, and phone too on the bills of all of us who makes over $30K a year. You know, the “rich”!

Supposedly, the poor can then apply for cheaper rates (b/c we are overpaying). Of course, no one keeps track of the money and reports on it. We could be paying for pensions and benefits or other holes in their budget too.

Exactly. It’s all about control. If you can only go where mass transit will take you then you can only go where the government wants you to go. Which means no escaping the liberal “utopia”.

Cars prevent this from happening. Which is why liberals oppose it. If someone came up with a car that actually ran on perpetual motion that was practical, cheap, and emitted no pollution whatsoever the left would find some way to oppose it.

I keep wondering why there is no class action lawsuit against these edicts made by this administration. Perhaps some citizens out there should form a coalition, get some good lawyers, and file a class action lawsuit. Oh, but wait. That would require lawyers to get on board and there probably would not be the hundreds of millions of dollars available in payoff to get them interested.

Don’t worry… the Dem’s solution will be an energy cost refundable tax credit. Even those who pay zero in fed tax will be able to file for a “refund”. (AKA Free Money.)
But, even after spending $B’s on educating those who pay no taxes how to file, not enough will. So, Obama’s new OFA army of former OWS folks will patrol poor minority neighborhoods, offering new $20 bills (with Geithner’s sig) at random.
But, that won’t work so well either as OWS folks get robbed and beaten. So, the new program will be combined with SNAP*, doubling SNAP payments and allowing recipients to buy just about anything Wal*Mart sells. That way the money can go directly to China.

I can see where the elderly on fixed incomes are negatively affected, but the poor, who pay little to no taxes– who in fact, gain an income through earned income credit– also enjoy energy subsidies. With the safety nets of housing, food, health care, and energy costs, the working poor appear to have an advantage. Even their transportation needs are subsidized with the tax-payers’ support.

You know, when I was asked earlier about the issue of coal, uh, you know — Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.

Even regardless of what I say about whether coal is good or bad. Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it — whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.
52% of the voting public were either not listening or were under the belief that they are sufficiently insulated from the effects of his plans.

Fallon on February 8, 2012 at 9:58 AM

The media did a fine job in suppressing that soundbite instead of trumpeting it on the news repeatedly on the top of the hour.

I am middle class. It costs more per gallong for oil for my house, than super premium unleaded gas for my car. If I were prone to them, I’d have an anxiety attack each month when they deliver oil and leave the bill in my mailbox. Last time it was $672.

The only surprise here (to me, anyway) is how Obama’s voting-base still WILL NOT acknowledge any responsibility on his part, in causing this. Three years ago, I thought most of his constituents would in fact turn on him, by now. But they haven’t.

There are many factors in play that suggest gas prices will go through the roof this summer, and BHO is responsible for most of those factors. High gas prices are something that voters see every day and it doesn’t matter if the media tries to ignore them.

Norky on February 8, 2012 at 11:06 AM

The last thing the media will do is ignore high prices for anything. They’ll just blame it on republicans. And it’ll work. Again.